Touché OnLive.

by David Klemke on October 6, 2010

OnLive and I have a very strange relationship. In the beginning I thought it was a potential money winner that would be hamstrung by the company’s desire to monetise their service from the get go. 9 months later I changed my tune somewhat when they announced that they’d be offering free trials to a decent handful of people and believed that the service could survive as a niche service for city dwelling casual gamers. I started to come around to the idea in its entirety when one of its competitors demoed World of Warcraft running on the iPad, something which I thought could easily be a common use case for their target market. With almost one and a half years separating my first post on them and today’s entry I have to say back then I didn’t expect them to come as far as they have today, nor for them to go in the direction they have.

My initial complaints about the service having a monthly fee were probably the biggest sticking point for many potential users. Having to pay US$15 per month to access the games (which you also have to buy) is something people just aren’t comfortable doing when digital distribution platforms like Steam do it for free. They won my approval when they offered quite a few people free trials that extended past a year which I believed would help get them that critical mass of users they needed in order to be attractive for their investors. In reality the opposite was true since free users won’t necessarily migrate to a paid product but paying customers are paying customers, ensuring that you not only have a viable product but also a viable market.

I really hadn’t heard anything more about the service until yesterday when I stumbled across one of their blog posts that detailed something quite extraordinary:

It’s official: There will be no base monthly fee for the OnLive Game Service going forward. WOOT!

No credit card needed, unless you decide to buy a 3-day, 5-day or Full PlayPass. And ongoing access with no monthly fee. Of course, we’ve had a promotion waiving the monthly fee for the first year, so this announcement is confirming what we had hoped—that we can continue without a monthly fee beyond the first year. Although we wish we could have confirmed no monthly fee from the get-go, pioneering a major new video game paradigm is hard: we had to first grow to a large base of regular users before we could understand usage patterns and operating costs. Now that we’ve reached that stage, we can confidently say a monthly fee is not needed, which deserves a double WOOT! WOOT!

I must say it really took me by surprise when I read that. Knowing that video streaming services are extremely bandwidth intensive and highly unprofitable (YouTube still isn’t profitable) I struggled to see how they could make a decent amount of money without charging monthly access fees. OnLive of course knows their finances better than anyone and it appears that the monthly fees were just a temporary measure to get them over that initial hump of users required to get them a steady stream of funding from their primary market: games sales. I hadn’t really looked into how they were doing this but having a quick look around their website I can see where the potential revenue is coming from.

For most games there’s 3 different purchase options. The 3 and 5 day play pass let’s you play the game in question for their amount of time from the day you purchase it. This isn’t game time mind you so it’s more like you’re renting that game for 3 or 5 days. The last option is the full play pass which allows you to play the game for as long as it is available on OnLive’s servers. They state in their support section that all games will be supported for at minimum 3 years from the point they’re first available so in essence even the full pass is still a rental, just one with an uncertain end date.

The 3 and 5 day passes seem to be reasonably priced with the most expensive of their being $6 and $9 respectively. For many throw away games that you’ll only ever play once this is a pretty reasonable price and would open up quite a few games to those who’d traditionally shy away from them because of the price. It’s akin to Netflix’s idea of taking the pain out of renting rentals by letting you conduct the entire process from your home. In my opinion this is where OnLive will draw most of its sales as that’s the area where the service shines. The full play pass however is riddled with problems.

For starters the cost of full play passes aren’t universally cheaper than their digital download counter parts with many of them being the same price or higher, for example:

This also doesn’t take into account any multi-pack sales that Steam is famous for.

Sure I can understand the point that you’re paying for the ability to play a game anywhere and thus the costs aren’t really comparable but for anyone with a machine less than 3 years old (my current one is 2) you could easily play any of these games without needing OnLive anyway. This is due solely to the consolisation of PC games and won’t be changing for anytime in the foreseeable future. Thus whilst you do gain flexibility from buying these games in OnLive you can only guarantee them to be there for 3 years and once they decide to stop supporting it you’re sweet out of luck. There’s no way to download your purchase once they’ve decided to flip the kill switch, effectively ending your ability to use your purchase forever.

This is the one aspect of OnLive that I absolutely detest, it’s the ultimate DRM that games publishing companies have been salivating over for years. Users of OnLive can’t trade their games with friends nor sell them to a used game shop in order to buy additional games. Effectively this turns all game “purchases” in OnLive into rentals under the control of the games publishers and the OnLive service, stripping away any freedom the end user might have once had. It is purely based on this fact that I will never, ever buy a full play pass from OnLive and will be extremely hesitant to use it for anything save reviewing the service itself as I can not condone this kind of behaviour from any corporation.

OnLive at its heart is a brilliant idea to bring gaming to those who can’t afford the time or monetary investment to stay on the cutting edge of gaming but still have a desire to. However every time I find something to love about the service I find yet another thing to hate about it and as it stands today I can not recommend it for anything past renting a throwaway game. The core ideas are solid and should OnLive make an effort to improve their service through say letting you download full purchases through their client then I’d have no trouble recommending them. For now though I’ll have to abstain from what is the worst form of DRM I’ve ever encountered and hope that everyone else will do the same.

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2 Comments

Can you sell, trade or swap on steam? Other digital distribution methods have similar flaws. Although when you buy things like the orange box for 10 bucks swapping it is probably not an option you are considering.

Good point, you can’t and I’d consider that a valid reason to avoid Steam. However they do allow you to download the media as many times as you want and install it on many other systems. They also have an offline mode that, in the event of their servers disappearing, can be used to play those games without having to talk to their DRM servers (with unofficial confirmation that should Steam disappear they’ll patch the games to be playable without it). OnLive doesn’t provide any such features and is therefore a much worse option than something like Steam.

You just reminded me of a time when one of my house mates tried to cash in Halo 1 that was missing a manual. The store said they’d give him $3 for the game but the system automatically deducted $5 for a missing manual, meaning he’d have to pay them $2 to get rid of it. I think you’d get into the same sort of thing with the Steam games (and the multi-packs too), but being able to gift your games to friends would be an awesome addition, however unlikely it might be.